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PROJECT PROFILE ON ELECTRONIC REMOTE
CONTROLLED TOY
1. Product:- Electronic Remote Controlled
Toy
2. NIC Code (1998):- -
3. Product Code (ASICC-2000):- -
4. Production capacity:- Qty. 2400 Nos
(Value Rs 54,00,000)
5. Month & year of Preparation:- 2009 – 2010
6. Prepared by:- MSME-Development Institute
Govt . of India, Ministry of MSME
Ayyanthole, Thrissur - 680 003
Phone No : 0487- 2360638, 2360536,
2360686
www.msmedithrissur.gov.in
E.mail:
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Project at a Glance
Name of the Product : Electronic Remote Controlled
Toy
Production Capacity : 2400 nos:
Total Investment : Rs.15,46,100
Working Capital Required : Rs.10,38,600 (for 3 months)
Rate of Return on Investment : 65.00%
Yearly Turnover : Rs.54,00,000
Break Even point : 47.74%
Profit Ratio : 18.61%
No: of Employees : 13
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1. INTRODUCTION
The very word toy makes you remind of your childhood. The toys are
categorized into many in India and the plastic toys have a market share of
nearly 80% of the total toy industry in the country. Other types of toys
available in the market are fabric toys, paper toys, and wooden toys, metal
toys and DIY toys (containing arts and craft toys) that are manufactured
mostly by the cottage industry. However, out of these the metal toys are
considered to be sharp toys which are harmful for children and a hindrance
in their safety, that is why these toys are known to be slowly loosing it's
popularity. Another popular category of toys seen today are educational toys
and activity toys which help build the mind and body of the child, then there
are soft toys, Electronic toys, battery operated toys and board games like
chess and monopoly.
There are different types of Electronic toys available in the market.
Electronic toys with or remote, walkie talkie sets for kids, toy radios,
musical toys, hand-held video games, video games used with T.V, Arcade
entertainment products, educational toys etc are popular among Indian
children. This report is about a remote controlled car toy. There are a
number of Remote controlled Toys in the market. These, include Cars,
trucks, playing machines and other equipments. There are differences in the
mechanical assembly of these types of toys but the basic Electronic principle
is the same. These types of toys have four main units i.e., Transmitter,
Receiver, Motor and Power Source. The transmitter sends radio wave which
is received by the receiver which is fitted with an antenna. These signals are
used to activate the motor. The power source is typically a rechargeable
battery pack, but sometimes it's just normal batteries.
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2. MARKET PRESPECTIVE
The Indian middle class is prospering and even the 20% of the Indian
population which is considered as the middle class constitute a huge market
for any product/service. India’s urban population is the second largest in the
world, greater than the combined urban populations of all countries except
China, the US and Russia. India has over 800 Indian toys and games
manufacturers, exporters and suppliers. Most of the Toy manufacturers in
India are from the unorganized sector. Mattel Toys, Funskool & Lego are a
few International players in the Indian toy industry. The Indian toy industry,
fueled by the vast domestic market, has now turned its attention to global
markets and is fast gearing up to meet international demands. The strong
points of Indian toy industry are skilled workforce, diverse range, focus on
innovation and creativity, and emphasis on learning and education. Indian
manufacturers are catering to both large and small volume requirements and
are exporting to few of the most developed nations. Indian toy industry set to
grow at 25% in the coming years.. Worldwide, the market for toys is huge
and offers immense potential for companies to pursue. But the interests of
children, who are the primary consumers for toys, are changing faster than
ever, toy manufacturers have to create innovative toys to capture their
interests.
Toys these days are popular not only with kids but adults have also
entered this field through the medium of sports and games. Today many
sports and games are played by the adults at national and international levels
representing their country. Parents, now-a days also prefer to play with their
child in order to interact well with the child So, they are seen to playing
boards games and other toys with their children
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The Indian market is slightly different from that of overseas, where toys
are bought as a child's development aid, i.e. they are considered to be
equivalent to books. But in India the scene is slightly different. Unlike
other developed economies amount of toys spent per child in India is very
low. The metros and 'A' category town account for most of the branded
purchase and sell even at higher price points. Largely the rest of the market
is highly price sensitive and items above Rs.200 results in planned purchase
and not in the impulse buying. In C and D category towns, unbranded and
lower priced toys are sold at average price points below Rs.100. However,
the scene in India is changing very fast and there is enough scope for more
number of players in the field.
The Indian toy industry today faces stiff competition from toy
manufacturers in China or Chinese toys. Manufactures of toys in India have
repeatedly been raising this issue with the Indian Government since it has
become increasingly difficult to compete with China toy manufacturers.
Chinese toys are available at a lower cost compared to Indian toys.
3. BASIS AND PRESUMPTIONS :
(i) The maximum capacity utilization on single shift basis for 300 days a
year. The Capacity Utilization of the unit is taken as 100% for financial
analysis.
(ii) The salaries and wages, cost of raw materials, utilities, civil
construction etc. are based on the prevailing rates in and around
Kerala. These cost factors are likely to vary with time and location.
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(iii) The cost of machinery and equipments refer to a particular
make/model and prices are approximate.
(iv) The project preparation cost etc. whenever required could be considered
under pre-operative expenses.
(v) The break even point percentage indicated is of full capacity utilization
(vi) Interest on term and working capital loan must be preferably on current
rate. In this project it is taken as 12%. Otherwise, the rate of interest on an
average may be taken at 16%. The rate may vary depending upon the
policy of the financial institutions/agencies from time to time
(vii) The essential production machinery and test equipment required for the
project have been indicated. The unit may also utilize common test facilities
available at Electronics Test and Development Centers (ETDCs) and
Electronic Regional Test Laboratories (ERTLs) set up by the State
Governments and STQC Directorate of the Department of Information
Technology, Ministry of Communication and Information Technology, to
manufacture products conforming to Bureau of Indian Standards.
4. IMPLEMENTATION SCHEDULE
The major activities in the implementation of the project have been
listed and the average time for implementation of the project is estimated at
12 months:
Sl.No. Name of Activity Period in
Months
(Estimated)
1. Preparation of project report 1
2. Registration and other formalities 1
3. Sanction of loan by financial
institutions
3
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4. Plant and Machinery:
(a) Placement of orders 1
(b) Procurement 2
(c) Power connection/ Electrification 2
(d) Installation/Erection of
machinery/Test Equipment
2
5. Procurement of raw materials 2
6. Recruitment of Technical
Personnel etc.
2
7. Trial production 11
8. Commercial production 12
Notes
1. Many of the above activities shall be initiated concurrently.
2. Procurement of raw materials commences from the 8th month onwards.
3. When imported plant and machinery are required, the implementation
period of project may vary from 12 months to 15 months.
4. TECHNICAL ASPECTS
I. Manufacturing process
The radio controlled toys have four main parts:
Transmitter – The transmitter sends radio waves to the receiver.
Receiver - An antenna and circuit board inside the toy receives signals
from the transmitter and activates motors inside the toy as commanded by
the transmitter.
Motor(s) - The transmitter sends a control signal to the receiver using radio
waves, which then drives a motor, causing a specific action to occur. The
motor in a car may cause the wheels to turn wheels, steer the vehicle,
operate propellers etc
Power source, the power source is typically a rechargeable battery pack,
but sometimes it's just normal batteries. Manufacturing process involves
the assembly of electronic circuits, electro mechanical hardware parts,
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Mechanical assembly and other sub assembly parts as per the design.
Subsequently, the electronics assembly-the ICs, transistor, diodes,
resistors, capacitors, coils, electromagnetic relays, are assembled on
PCBs as per design. The assembled PCBs are tested for the desired
performance. The electronics assembly along with electromechanical
assembly, hardware such as connectors/switches, mechanical assembly
and light emitting diodes are assembled and housed in a fiber / plastic toy
car case.
II. PRODUCTION ENVISAGED
Item Quantity /Annum Value/ Annum (Rs.)
Remote Controlled Toy
Car
2,400 54,00,000
III. POLLUTION CONTROL
The Govt. accords utmost importance to control environmental
pollution. The small-scale entrepreneurs should have an environmental
friendly attitude and adopt pollution control measures by process
modification and technology substitution.
India having acceded to the Montreal Protocol in Sept. 1992, the
production and use of Ozone Depleting Substances (ODS) like Chlorofluoro
Carbon (CFC), Carbon Tetrachloride, Halons and Methyl Chloroform etc.
need to be phased out immediately with alternative chemicals/solvents. A
notification for detailed Rules to regulate ODS phase out under the
Environment Protection Act, 1986 have been put in place with effect from
19th July 2000.
The following steps are suggested which may help to control pollution
in electronics industry wherever applicable
In electronic industry fumes and gases are released during hand
soldering / wave soldering/Dip soldering, which are harmful to people as
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well as environment and the end products. Alternate technologies may be
used to phase out the existing polluting technologies. Numerous new fluxes
have been developed containing 2-10% solids as opposed to the traditional
15-35%solids
Electronic industry uses CFC, Carbon Tetrachloride and Methyl
Chloroform for cleaning of printed circuit boards after assembly to remove
flux residues left after soldering, and various kinds of foams for packaging.
Many alternative solvents could replace CFC-113 and Methyl
Chloroform in electronics cleaning. Other Chlorinated solvents such as
Trichloroethylene, Perchloroethylene and Methylene Chloride have been
used as effective cleaners in electronics industry for many years. Other
organic solvents such as Ketones and Alcohols are effective in removing
both solder fluxes and many polar contaminants.
IV. ENERGY CONSERVATION
With the growing energy needs and shortage coupled with rising
energy cost, a greater thrust in energy efficiency in industrial sector has been
given by the Govt. of India since 1980s. The Energy Conservation Act, 2001
has been enacted on 18th August 2001, which provides for efficient use of
energy, its conservation and capacity building of Bureau of Energy
Efficiency created under the Act.
The following steps may help for conservation of electrical energy:
i) Adoption of energy conserving technologies, production aids and testing
facilities.
ii) Efficient management of process/manufacturing machineries and
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systems, QC and testing equipments for yielding maximum Energy
Conservation.
iii) Optimum use of electrical energy for heating during soldering process
can be obtained by using efficient temperature controlled soldering and de-
soldering stations.
iv) Periodical maintenance of motors, compressors etc.
v) Use of power factor correction capacitors. Proper selection and layout of
lighting system; timely switching on-off of the lights; use of compact
fluorescent lamps wherever possible etc.
6. FINANCIAL ASPECTS
(I) Land and Building
Built up area 200 sq. mtr
Office/ Stores 40 sq. mtr
Factory 160 sq. mtr
Rent (per month) 10,000/-
(II) Plant, Machinery and Equipments
Sl.
No.
Description Ind./
Imp.
Qty. Amount
(Rs.)
1. Digital Multimeter ,4½Digit Ind 2 22000
2. Temp Controlled Soldering Unit Ind 4 20000
3. LCR Meter Ind 2 20000
4. Drilling machine Ind 1 6000
5. Analog Multimeter Ind 2 2000
6. Tool Kit Ind 4 20000
7. Electronic screw driver & screw
feeder
Ind 5 30000
8. Combined Soldering De soldering
Station
Ind 2 35000
9. High speed mini drill set Ind 3 30000
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10. Digital Storage Oscilloscope
60 MHz
Ind 1 60000
11. Personal Computer with UPS and
Printer
Ind 2 80000
12. Electrification charges @ 10% of
machinery and equipments
32500
13. Office Furniture, Working tables and Equipments 50000
14 Tools, Dies and Equipments 50000
15 Pre operative expenses 50000
Total fixed cost 5,07,500
B. WORKING CAPITAL (PER MONTH)
Recurring Expenditure per month
(i) Staff & Labor
Sl.No. Designation No. of
persons
Salary/Month
(Rs.)
Total salary
per month
(Rs.)
1 Accountant 1 6000 6000
2 Design Engineer 1 10000 10000
3 Production Manager 1 8000 8000
4 Sales/Service support
Engineers
2 6000 12000
5 Skilled workers 3 5000 15000
6 Semi Skilled Workers 2 4000 8000
7 Un Skilled Workers 2 3000 6000
8 Peon/watch man 1 3000 3000
Perquisites@ 15% 10200
Total 78,200
(ii) Raw Material
Sl.
No.
Description Ind/Imp Qty(nos) Amount(Rs)
1 Plastic /Fiber body chassis Ind/Imp 200 16000
2 RC Toy car motor controller Ind/Imp 200 52000
3 Front& rear brushless motor 350 52500
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4 RC Pro Lite V2 730mAh 7.4V
2 Cell Li Poly 2s 730 Lithium
Battery
Ind/Imp 200 16000
5 Fire Retarding Lithium
Polymer Battery Charger
Ind/Imp 200 22000
6 Metal Gear Micro RC Servo Ind/Imp 200 28000
7 Remote control unit Ind/Imp 200 20000
8 Wires and cables. Connectors,
consumables, mechanical parts
,Electronic Parts ,Packing
materials etc.
Ind Ls 10000
Total 2,16,500
(iii) Utilities per month
Sl. No. Description Amount (Rs.)
1 Power 4500
2 Water 500
Total 5000
(iv) Other Contingent Expenses (per month)
Sl.
No.
Description Amount
(Rs.)
1 Rent 10000
2 Postage and stationery 2500
3 Telephone /Telex/Fax 3000
4 Repair & maintenance 5000
5 Transport and Conveyance charges 10000
6 Advertisement and Publicity 10000
7 Insurance 1000
8 Miscellaneous expenditure 5000
Total 46,500
Total recurring expenditure per month Rs.3, 46,200
Working Capital (3 months) Rs. 10, 38,600
C. TOTAL CAPITAL INVESTMENT
(i) Fixed capital 5,07,500
(ii) Working capital for 3 months 10,38,600
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Total 15,46,100
10. FINANCIAL ANALYSIS
(I) Cost of Production (per annum)
Sl.
No.
Description
(Rs.)
1 Total recurring expenditure 41,54,400
2 Depreciation on m/c & Equipments @ 10% 32,500
3 Depreciation on office furniture @ 20% 10,000
4 Depreciation on tools ,jigs and fixture @
25%
12,500
5 Interest on capital investment @ 12% 1,85,532
Total 43,94,932
(II) Turnover per annum
Item Qty (Nos) Rate/Unit (Rs.) Total sales (Rs.)
Electronic RC Toy car
2400
2250
5400000
(III) Profit per annum (Before Taxes)
Turn over per annum – Cost of production per annum = 5400000 –
4394932
= 10, 05,068
Profit ratio = (profit/annum) X 100
(Sales/annum)
= 1005068/ 5400000
= 18.61 %
Rate of return = Profit/annum X 100
Total Capital investment
= 1005068/1546100 x 100
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= 65.00 %
D. Break-even Point
Fixed Cost per annum Rs
Rent 120000
Depreciation on m/c & Equipments @ 10% 32500
Depreciation on office furniture @ 20% 10000
Depreciation on tools ,jigs and fixture @ 25% 12500
Interest on capital investment @ 12% 185532
Insurance 12000
40% Salaries and wages 375360
40% other contingent expenses (excluding rent &
Insurance)
170400
Total 9,18,292
Break-even Point
Fixed cost × 100
= ------------------------
Fixed cost + Profit
= 918292 x 100
918292 + 1005068
= 47%
11. FINANCIAL PATTERN
Resources for finance
1. Term loans from financial institutions ( 65% of fixed capital) @
12.00% p.a rate of interest = 507500 x 0.65
= 3, 29,875
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2. Bank Loans for 3 months (65% of working capital) @ 12.00% p.a rate
of interest
= 1038600 x 0.65
= 6, 75,090
3. Self raised capital from even funds & loans from close ones to meet
the margin money needs at a rate of 12.00% p.a rate of interest =
1546100 – 675090 – 369875
= 501135
Instalment Payable in 5 years
Year To financial
Institutions
(Rs. 329875) /5
To
commercial
banks
(Rs.675090)
/5
To others
(Rs.501135)/5
Total
1 65975 135018 100227 301220
2 65975 135018 100227 301220
3 65975 135018 100227 301220
4 65975 135018 100227 301220
5 65975 135018 100227 301220
Interest payable in 5 years
Year On term loan (Rs.
329875) @ 12.00% p.a
On bank loan
(Rs. 675090)
@ 12.00%
p.a
On Self loans
(Rs. 501135)
@ 12.00%
p.a
Total
1 39585 81011 60136 180732
2 34835 71290 52919 159044
3 30655 62735 46570 139960
4 26976 55207 40981 123164
5 23734 48582 36064 108380
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Total Repayment Schedule for 5 years
Year Interest Installments Total
1 180732 65975 246707
2 159044 65975 225019
3 139960 65975 205935
4 123164 65975 189139
5 108380 65975 174355
Depreciation chart for 5 years
Year Plant & Machinery
(Rs.357500) @
25.00% p.a
Furniture & Office Equipment
(Rs.150000) @ 20% p.a
Total
1 89375 30000 119375
2 67031 24000 91031
3 50273 19200 69473
4 37705 15360 53065
5 28279 12288 40567
Profit analysis for 5 years
Year Cap.
Utilizatio
n
(%)
Sales Manufacturin
g Expenses
Gross
Profit
Deprec
iation
Interest
before
tax
Net
profit
before
tax
Net
profit
after
tax
1 70 3780000 2908080 871920 119375 180732 571813 371675
2 80 4320000 3323520 996480 91031 159044 746405 485163
3 80 4320000 3323520 996480 69473 139960 787047 511581
4 90 4860000 3738960 1121040 53065 123164 944811 614128
5 100 5400000 4154400 1245600 40567 108380 109665
3
712825
Cash Flow Statement for 5 years
Year Cap.
Utilization
(%)
Net
profit
after
tax
Depreciation Cash in
hand
Repayment
of
Installment
Net
Surplus
1 70 371675 119375 491050 200993 290057
2 80 485163 91031 576194 200993 375201
3 80 511581 69473 581054 200993 380061
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4 90 614128 53065 667193 200993 466200
5 100 712825 40567 753392 200993 552399
Projected Balance Sheet for 5 years
Year 1 2 3 4 5
Cap.
Utilization
(%)
70 80 80 90 100
Liabilities
Promoter’s
Capital
501135 501135 791192 1166393 1546454 2012654
Net
Surplus
0 290057 375201 380061 466200 552399
Term
Loans
329875 263900 197925 131950 65975 0
Working
Capital
loans
675090 540072 405054 270036 135018 0
Total 1506100 1595164 1769312 1948440 2213647 2565053
Assets
WDV of
fixed asset
507500 388125 297094 227621 174556 133989
Working
Capital in
stock
0 495832 597001 680012 776243 895212
Surplus
funds
998600 711207 875217 1040807 1262848 1535852
Totals 1506100 1595164 1769312 1948440 2213647 2565053
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12. ADDITIONAL INFORMATION
(a) The Project Profile may be modified/ tailored to suit the individual
entrepreneurship qualities/capacity, production programme and also to suit
the location characteristics, wherever applicable.
(b) The Electronics Technology is undergoing rapid strides of change and
there is need for regular monitoring of the national and international
technology scenario. The unit may, therefore, keep abreast with the new
technologies in order to keep them in pace with the developments for global
competition.
(c) Quality today is not only confined to the product or service alone. It also
extends to the process and environment in which they are generated. The
ISO 9000 defines standards for Quality Management Systems and ISO
14001 defines standards for Environmental Management System for
acceptability at international level. The unit may therefore adopt these
standards for global competition.
(d) The margin money recommended is 25% of the working capital
requirement at an average. However, the percentage of margin money may
vary as per bank's discretion.
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13. ADDRESSES OF RAW MATERIAL SUPPLIERS
Sl.No Addresses
1. M/s. Applied Electronics Ltd.
A-5,Wagle Industrial Estate,
Thane-4, (Mumbai)
2. M/s. Bakumbhai Ambalal
Electronics Dept.
Kaiser-T-Hind Building,
Ballard Estate, Mumbai-38.
3. M/s. Electronics Trade and
Technology Dev.
15/48,Malcha Marg,
New Delhi-21
4. M/s. OEN Connectors Ltd.
Vyattila, PB No.2, Cochin-19
5. M/s. DC Plastics
27, D. L. F. Industrial Area,
Opposite Moti Nagar, Delhi –110015
Phone:+(91)-(11)-25118936/9810239067
Mobile / Cell Phone: +(91)-9810239067
6. M/s Sun International,
A-290, Weavers Colony Ashok Vihar,
Phase-iv, New Delhi110 052, India
Phone: +(91)-(11)-27442262
Fax: +(91)-(11)- 25461559
Mobile / Cell Phone: +(91)-9810266345
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14. ADDRESSES OF TEST EQUIPMENTS SUPPLIERS
Sl.No addresses
7. M/s Kamal Electronics
14, Lakshmi Building,
J.C Road,
Bangalore
560002
8. Aplab Limited
XL 1/583,II Floor
Krishna Nivas
Adv.Eashwara Iyer Road,
Kochi 682 035
Phone 0484 2361623
Email [email protected]
9. M/s Guru Agencies,
M.G Road,
Ernamkulam,
Kerala.
10. M/s. Meco Instruments Private Limited
P.O. Box 6388,
301, Bharat Industrial Estate
T.J. Road
Sewree(W)
Mumbai-400015
Tel.022-24137253/24137423
Email [email protected].
www.mecoinst.com
11. M/s. Laxmi Electrotek
Manappat Centre
HMT Junction
Kaloamassery P.O
Ernakulam District
Kerala 683 104
Phone 0484-2551288, 2540321
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12. NI Systems (India) Private Limited
Bangalore : 91 8041190000
Delhi : 91 1142658282
E mail [email protected]